September 28, 2010

Is Renting Better Than Buying?

While we have always rented out of necessity, sometimes I wonder why I look forward to owning our own place.  Is the idea of owning a house so ingrained in our culture that it becomes an unquestionably virtuous mission?

The American Dream is a little shaky now, as housing prices in mid-2010 continue to fall (despite more rosy predictions).  Even though we could actually benefit from falling prices, my dream is a little shaky too.

Blame it on the Coupon Clipper Magazine, Savvy Decor and Home, which arrived in our Syracuse mail box. On the cover, an attractive Greek-revival living room with crown molding, arched windows and a fire blazing in the fireplace.  Underneath curlicue script taunting:  “Another dream realized.”

Yet, when I looked inside for thousands of dollars of savings, I was horrified to realize what home-owners are going through:

• cracking driveways and snow to plow
• pools to maintain and playgrounds to install
• drafty windows and clogged air ducts
• radon testing and foundation damage
• landscaping, pruning, mulching, aerating and hydro-seeding
• sealing decks and repairing fences

If these ads are any indicator of real needs, I’m worried.  Do I want to become a harried grown-up with a furrowed brow, sighing over the next $600 spent on a broken furnace, a sagging gutter, or a nest of foxes under the deck?

Already I feel like we get huffy enough over our cars, which we’ve owned for a total of three months.  One or the other always seems to need fixing. Yes, I’m new here, but among my closest friends I can almost count Kevin in Honda Service.

Yet our determination to buy a place persists. Next year we hope to smack down our life savings on an abode. I agree there is a lot to love about a single-family house, but really, a 4-bedroom apartment is looking really good right now.

You may have seen a version of this article on my site a few months ago. I’ve revamped it for Buttoned Up this week, and you can read the short article here.

For a very compelling argument on why renting is better than buying, see this article from Get Rich Slowly.

I’m curious.  If you own a house, do you think it’s worth the trouble?  I’d love to hear your take in the comments section below.

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10 comments

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  Saver October 25, 2010, 5:10 pm

  There’s definitely no hurry to buy a house. There are many more expenses and hassles in owning. But, if you own your own home, you can customize it just how you want it.

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    Amy October 26, 2010, 10:43 am

    i John,

    Thanks for your comment. I agree on your points. I hope I can make the right decision when the time comes!

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  Meagan Francis September 29, 2010, 6:01 pm

  We bought our first house last March, believing we finally lived in an area where “it’s cheaper to buy than rent.” The cost of quality rental property in this area is high and I balked at a monthly payment that was a couple hundred dollars more than a mortgage and taxes combined.

  But…we’ve spent several thousand dollars so far in improvements and repairs, and there’s no end in sight. When you consider the amount of money we’ve put into making this home the way we want it (and it’s nowhere near the way we want it) the monthly cost has been far higher than renting.

  BUT…that’s the point, I guess. We can make it the way we want it. And theoretically, at some point in the future we’ll have equity in the home. There are also the tax breaks and such. I think that if you’re looking at pure dollars and cents, it’s probably cheaper to keep on renting…even if you’re talking years. But if you get satisfaction out of fixing things up, or can’t find what you want in a rental, or are in it for the long haul, I vote to buy.

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  Amy September 29, 2010, 4:03 pm

  Betsie – Thanks for sharing your perspective. Amazing that there are a lot of cons to something that we idealize.

  Jen – I totally agree on the impersonality of an apartment, and the stress of keeping it in tip top shape. I’m glad you don’t regret your choice and that you stand to make some money from it. All that hard work will pay off!

  Tawna — Wow, 7 years! I’m impressed. I agree that the question is different for everyone, especially given that housing prices vary per region.

  Nancy — So true about home ownership having sentimental and symbolic value, which is no small thing, and is worth something. And also true about how that value has to be reestablished each time in our time when families are so transient.

  Thanks all for telling me your thoughts!

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  Nancy Feyen September 29, 2010, 12:56 pm

  I think home ownership has strong sentimental and symbolic value when the home stays in the family for generations. It was deeply meaningful–at least looking back on it now–to have visited the house and played in the garden where my mother and grandparents lived. With people moving around so much nowadays, this most important element is missing. I’m glad we own our condominium and that it’s paid for. The maintenance work load is lighter in a condo, although maybe more expensive. I hope we’ll live here long enough for our grandchildren to visit us here. I doubt if either of our children will want to own it after we die, although it would please me if they would. That shows that I’m old! They probably won’t settle in this city or even in this country.

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  tawnya September 28, 2010, 8:43 pm

  I think it’s a different answer for every person. For us, and for where we live (which is the tipping point!), yes. But only because we will have our 30 year paid off in about 7. If we were living elsewhere under other circumstances? The answer may be different. But it’s something that we thought long and hard about and did a pro/con list over and really thought about for US – not for some mythical American Dream. Or, heaven forbid, investment!

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  Jen September 28, 2010, 7:21 pm

  I have been pondering this very issue quite a lot recently! We purchased our home back in 2006 after renting an apartment for a year. Being in the architectural field, I was really anxious to try out some of my ideas in my own place, and I couldn’t tolerate the white walls that we weren’t allowed to paint. It was also stressful trying to keep our apartment in mint condition (we had a very strict landlady). So, we bought a fixer. Turned out the homeowner wasn’t exactly forthcoming about all of the issues that the house had, and we ended up needing to repair more than we bargained for. Even the items we knew about ended up being more work than I had imagined. That said, I don’t truly regret having purchased a house, but sometimes I really wish all the maintenance issues were somebody else’s problem! We should stand to get a pretty good return on investment when we sell, which wouldn’t be the case if we were still renting. I am hoping our next purchase will be new or newly renovated!

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  Betsie September 28, 2010, 6:13 pm

  We own our home (well, technically we’re renting from the bank for the next 26 years) and I admit there are almost as many cons as there are pros. I love that we can do anything we want to the place and that we can really settle in. But I hate that we have to fix everything that breaks and that we are responsible for the property and taxes, etc. I don’t think we’d go back to renting unless we had to, but it definitely has been a crazy roller coaster ride for the last 4.5 years!